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Adjustable-rate mortgage loans
Rent vs. Buy
Understand the financial differences between renting and homeownership.
Tax Savings
Learn about the potential tax savings with homeownership.
How Much Can You Afford?
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How Much Can You Borrow?
Learn how much money you might be able to borrow.
Adjustable-Rate Mortgage Loans (ARMs)
Adjustable-rate mortgage loans, commonly known as ARMs, are loans in which the interest rate can change during the life of the loan. Clay County Savings Bank offers 1-year, 3/1 and 5/1 ARMs. The interest rate on the 1-year ARM adjusts annually. The interest rate on the 3/1 and 5/1 ARM is fixed for the first 3 or 5 years, respectively, and then adjusts annually thereafter. At the end of the initial period and at every adjustment period, for owner-occupied home loans, the interest will adjust to 275 basis points (the "margin") over the weekly average yield on U.S. Treasury securities adjusted to a constant maturity of one year (the "index").
Why choose an ARM loan? ARMs usually start with a lower interest rate and a lower monthly payment than a fixed-rate mortgage loan. The lower rate (and lower monthly payment) may allow for a higher loan amount. ARMs are popular for those who do not plan on living in their home for the entire term of the loan. This will allow you to capitalize on the initial lower payments. You may also want to consider an ARM, if you plan on your income increasing, which will offset the impact of potentially higher payments should the interest rate increase.
If you choose an ARM loan, you need to remember that the interest rate can change during the life of the loan, which would mean that your monthly payment would increase or decrease. However, Clay County Savings Bank has rate caps ("ceilings" and "floors") on all ARMs for each adjustment period and over the life of the loan. Typically, for owner-occupied home loans, the interest rate may not increase or decrease more than 2.00% during any change or adjustment date and no more than 5.00% from the initial interest rate during the lifetime of the loan.
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Fixed-rate mortgage loans are the most common mortgage for many homebuyers because the monthly payments (of principal and interest) are stable. The interest rate you lock-in at the time of application will be the same interest rate you pay for the life of the loan. Clay County Savings Bank offers a 15-year, 20-year or 30-year mortgage. Maximum loan amount is $417,000. If loan amount exceeds $417,000, please see jumbo loans. Our fixed-rate loans are typically sold to Freddie Mac, but Clay County Savings Bank retains the servicing so you will always deal with us.
A fixed-rate mortgage loan is typically advantageous if you plan on owning your home for five or more years. If interest rates increase, your monthly payment of principal and interest will not be affected. However, it is important to note that your monthly escrow for taxes or insurance still may go up and effect your monthly payment, if taxes or insurance costs go up over time. Further, because of the long-term nature of fixed-rate loans, the interest rate is generally higher than other types of mortgage loans.
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Balloon mortgage loans are loans in which the monthly payment is not sufficient to repay the loan before it matures and a "balloon payment" (the remaining balance on the loan) is due at maturity. The interest rate is fixed for the term of the loan, but the monthly payment of interest is based on a longer amortization period than the term of the loan. Clay County Savings Bank offers a 5-year balloon mortgage loan. Maximum loan amount is $417,000. If loan amount exceeds $417,000, please see jumbo loans. Our balloon loans are typically sold to Freddie Mac, but Clay County Savings Bank generally retains the servicing so you deal directly with us.
As with an ARM loan, a balloon mortgage loan typically has a lower interest rate and a lower monthly payment than a fixed-rate mortgage loan. The lower rate (and lower monthly payment) may allow for a higher loan amount. Balloon mortgage loans are also popular for those who do not plan on living in their home for the entire term of the loan. This will allow you to capitalize on the lower payments. A note of caution is that, if interest rates rise sharply during the term of the balloon loan, you could face a large increase in your monthly payments when you reset or refinance your mortgage.
Some balloon mortgages have a "reset" option, which means you can reset the interest rate at the time the balloon payment is due to the current market interest rate for the remainder of the amortization period rather than pay off the mortgage loan. The reset option is typically only available if you are still the owner and occupant of the home, there are no other liens against the property and you've paid your mortgage on time.
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Jumbo loans are loans that exceed $417,000. Clay County Savings Bank offers 1-year, 3/1 and 5/1 ARMs and a 15-year, fixed-rate loan only. Please call or contact our office for current interest rates.
Non-Owner Occupied Mortgage Loans
Clay County Savings Bank offers loans on non-owner occupied property ("rental property"). Current programs available are ARMs and 15-Year Fixed-Rate. Clay County Savings Bank currently does not offer balloon loans or a fixed-rate program on non-owner property for a term greater than 15 years. Interest rates on loans on non-owner occupied property are typically 1 percentage point higher than the available program for owner-occupied property and a require a 1% origination fee. For ARMs, caps are 2/6 and margin is 3% over the weekly average yield on U.S. Treasury securities adjusted to a constant maturity of one year.
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Construction loans are available to both individuals and builders. Our interest rates are very competitive and we will loan up to 85% of the appraised value. One of the advantages of our construction loan programs are that the interest rate is fixed for up to 12 months. We also provide end-loan financing at a guaranteed rate. For builders, we offer both a custom and spec loan program. Among the services we provide are:
Bill Payer Service - Generally invoices are paid the same day and are guaranteed to be paid within 3 days of receipt.
1099 Processing - We obtain and maintain W-9 information and report 1099s to the IRS.
Lien Waivers - Every check issued from our construction loan department is stamped with a lien waiver.
Unlimited Draws
Monthly Loan-in-Process Statements
Check Out Current Interest Rates
Current Interest Rates & Loan Programs
|
Interest Rate/Annual Percentage Rate (APR) |
Comments |
|
| 1-Year ARM |
4.50% / 4.70% APR |
$375 origination fee, adjusts annually to 1-Year CMT + 2.75%, 2/5 caps |
| 3/1 Year ARM |
5.25% / 4.84% APR |
$125 origination fee, interest rate fixed for three years and then adjusts annually to 1-Year CMT + 2.75%, 2/5 caps |
| 5/1 Year ARM |
5.625% / 5.057% APR |
$125 origination fee, interest rate fixed for five years and then adjusts annually to 1-Year CMT + 2.75%, 2/5 caps |
|
15-Year Fixed |
6.00% / 6.01% APR |
$125 origination fee and No Points |
|
20-Year Fixed |
6.625% / 6.637% APR |
$125 origination fee and No Points |
|
30-Year Fixed |
6.625% / 6.634% APR |
$125 origination fee and No Points |
|
Non-Owner Occupied |
Initial rate on ARMs are 1% higher than interest rate for owner-occupied listed above. 5-Year Balloon and 20- & 30-Year fixed-rate loans not currently available but please call. 1/2% + $125 origination fee |
|
|
Construction - Builder Custom |
|
Interest rate of 6.25% fixed for first 12 months. 1% origination fee. |
|
Construction - Builder Spec |
|
Interest rate of 7.00% fixed for first 12 months. 1% origination fee. |
Interest rates are as of 09/30/2008 and subject to change, please call for current rates. Annual Percentage Rate (APR) is based on a loan amount of $150,000 and 80% LTV. These are sample loan programs and other loan programs are available. Typical closing costs and fees include appraisal fee ($350), credit report ($55), title insurance policy ($250), recording fees ($105), survey ($175) and flood certification ($12). Prepaid interest and reserves for taxes and insurance may also be applicable. Loans greater than 80% LTV require private mortgage insurance. CMT is the weekly average yield on U.S. Treasury Securities adjusted to a constant maturity of one year as made available by the Federal Reserve Board (1.95% as of 09/30/2008).
Clay County Savings Bank will only consider loans that would be legal loans as defined by applicable Federal Regulations. Funds permitting and with business plan goals in mind, Clay County Savings Bank will promote home ownership through mortgage lending to the fullest extent possible.
Clay County Savings Bank requires a written application signed by all obligated parties. In addition, the following items may be required:
A current credit report
Verifications of deposit, if applicable
Verifications of employment, if applicable
Verifications of rent and/or mortgages*, if applicable
Evidence of insurable title with title vested in borrower's name
Most recent year tax returns – a second year may be requested
Real estate contract signed by all parties on purchase loans
An appraisal or evaluation
Environmental report, if applicable
Survey or survey affidavits
Homeowners or fire and extended coverage insurance policy
Flood certification or flood insurance, if applicable
Private mortgage insurance, if applicable
Clay County Savings Bank may also require any additional documents that are deemed necessary to insure the Bank of an overall good quality asset.
The applicant's history in the use of credit and the manner in which credit obligations were paid will be considered. Any recent reports indicating slow pay, collections, repossessions, creditor lawsuits, defaults or foreclosures will be considered grounds for denial unless it can be established by the applicant in writing that the circumstances were temporary and beyond the control of the applicant. As a general rule, Clay County Savings Bank will not consider borrowers who have:
APPLICANT'S QUALIFICATION STANDARDS
On all residential loans, the Bank will review the monthly housing expense to income ratio and the monthly debt payment to income ratio as follows:
Monthly Housing Expense to Income Ratio - The Bank will normally require the total monthly housing expense (principal and interest payment), taxes, insurance premiums, homeowner's association dues and expenses required to be paid under the mortgage to not exceed approximately twenty eight percent (28%) of applicant's "stable monthly income".
Monthly Debt Payment to Income Ratio - The Bank will normally require that the total amount of monthly housing expense plus all other monthly payments on all installment debts having remaining terms of more than ten (10) months not exceed approximately thirty-six percent (36%) of applicant's "stable monthly income". Alimony, child support and maintenance payments are considered as long term monthly obligations, unless such obligations terminate in less than ten (10) months; therefore, they should be treated as such when figuring the monthly debt payment to income ratio. They may, on portfolio loans, be subtracted from gross income versus showing as a payment. This calculation works to the benefit of the consumer. Excessive consumer debt, in particular, high balance revolving charge accounts, will be scrutinized carefully when qualifying loan applicants.
On rental properties the primary source of repayment will be the income generated from the rental property. A minimum debt service coverage requirement (DSCR) of 1.25 is required. If the minimum debt service coverage is not in evidence, then there should be ample documentation and support to demonstrate other sources of repayment and the justification of the reliance on such resources.
Somewhat higher qualification ratios than exhibited above may be appropriate when there is a demonstrated ability by the applicant to accumulate wealth and there is a history of good debt service. Such ratios may also be offset by larger down payments resulting in greater buyer motivation and net worth substantial enough to evidence an ability to repay the mortgage loan, regardless of the debt to income ratios.
LOAN TO VALUE
Clay County Savings Bank will consider loans on single-family, two-to-four unit properties, condominium and town home properties with loan-to-values not exceeding 80%. Clay County Savings Bank will consider loans up to 95% loan-to-value if proper private mortgage insurance (PMI) is obtained. Clay County Savings Bank will adhere to loan limits established by the PMI Company on either owner occupied or investment properties. The Bank may consider self insuring single family dwellings on loan amounts of $300,000 or less with loan-to-values not exceeding 85%. Self-insured loans will require a fee of 1/2% of the loan amount but no additional monthly PMI related fees will be collected.
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